Tax perceptions and the demand for public expenditure: evidence from UK micro-data |
| |
Authors: | Norman Gemmell Oliver Morrissey Abuzer Pinar |
| |
Institution: | a School of Economics, University of Nottingham, University Park, Nottingham, NG7 2RD, UK;b Department of Public Finance, Faculty of Political Science, Ankara University, Ankara, Turkey |
| |
Abstract: | Using responses from the 1995 British Social Attitudes Survey (BSAS), this paper assesses if there is evidence of voter misperception of tax costs. We find convincing evidence of income tax (IT) and value added tax (VAT) misperceptions, with a systematic bias towards overestimation of tax burdens for VAT, contrary to predictions of the fiscal illusion literature. We then integrate tax misperceptions into a model of demand for public expenditure. Voters' spending preferences are strongly related to their incomes, actual tax costs, and other fiscal-related household characteristics. A tendency to overestimate tax burdens appears to have only a modest influence on demands for public spending. |
| |
Keywords: | Fiscal illusion Tax perceptions Public spending Income tax VAT |
本文献已被 ScienceDirect 等数据库收录! |
|